China has a monopoly on rare earth metals

Math­ieu Xemard. Rare-earth metals are a fam­ily of 17 metal­lic ele­ments with sim­il­ar physi­co­chem­ic­al prop­er­ties. They are rare only in name since they are rel­at­ively wide­spread on the plan­et. For example, the most abund­ant (ceri­um) is more com­mon in the Earth’s crust than cop­per. On the oth­er hand, they are highly diluted in depos­its where they are not the main met­al, and large quant­it­ies of ore must be mined to meet demand.

One of the char­ac­ter­ist­ics of these metals is their highly spe­cif­ic trade bal­ance. Sep­ar­a­tion pro­cesses require the isol­a­tion of each rare earth from ores where they are all sys­tem­at­ic­ally mixed togeth­er. The pro­duc­tion of each rare earth is there­fore not dic­tated by its own mar­ket, but by demand for the most sought-after ones. This is why the more abund­ant rare earths are strug­gling to find a mar­ket, while oth­ers are in high demand. Added to this is Chin­a’s near-exclus­ive mono­poly, des­pite the fact that the world needs more and more of cer­tain rare earths.

The most abund­ant (ceri­um and lanthan­um) are mainly used in cata­lysts for cata­lyt­ic con­vert­ers or for the cata­lyt­ic crack­ing of oil into pet­rol¹. The gradu­al dis­ap­pear­ance of intern­al com­bus­tion vehicles in favour of elec­tric vehicles can explain why the mar­ket is decreas­ing. Voltage rare earths are those used to man­u­fac­ture mag­nets: neo­dy­mi­um, dys­prosi­um, ter­bi­um and praseo­dy­mi­um. Their mar­ket is boom­ing. Neo­dy­mi­um-iron-boron mag­nets are the most power­ful mag­nets man­u­fac­tured today and are widely used to man­u­fac­ture power­ful mini­atur­ised motors, in elec­tric cars in par­tic­u­lar. Because of their remark­able mag­net­ic prop­er­ties, these mag­nets are also used in off­shore wind tur­bines – from 80 kg/MW to 200 kg/MW of rare earths in 2015, depend­ing on the tech­no­logy used² – and in robotics.

Once again, they are used in the form of mag­net­ic alloys in motors of all sizes or in hard disks. Because of their optic­al and elec­tron­ic prop­er­ties, they are also used in many optron­ic applic­a­tions (obser­va­tion, guid­ance, com­mu­nic­a­tion, etc.). They are present almost every­where in weapons sys­tems: for example, an Amer­ic­an F35 fight­er plane con­tains more than 400 kg of vari­ous mater­i­als con­tain­ing at least one rare earth³. Even if the quant­it­ies involved in arma­ments remain small com­pared with civil­ian mar­kets, this raises real ques­tions of sov­er­eignty because of Chin­a’s monopoly.

China accoun­ted for around 69% of the world’s pro­duc­tion of rare earth ores in 2023⁴. Far behind are the United States (12%), Burma (11%) and Aus­tralia (5%). Once these ores have been extrac­ted, they need to be pro­cessed to sep­ar­ate, puri­fy and refine each of the rare earths. How­ever, China is the only coun­try that car­ries out all these stages, with Aus­tralia and the United States selling some of their semi-pro­cessed ores back to China to com­plete the refin­ing! China thus pro­duces 85% of the pur­i­fied light rare earths used world­wide, and 100% of the heavy rare earths.

Yes, today China dom­in­ates the entire value chain. The coun­try has pro­gress­ively moved from extrac­tion to sep­ar­a­tion, via refin­ing and metal­lurgy, to the man­u­fac­ture of mag­nets. In the 1990s, Japan and the United States were the main mag­net man­u­fac­tur­ers. Their know-how was based on strong expert­ise in metal­lurgy and pre­cise con­trol of the com­pos­i­tion of the mag­net­ic alloys they pro­duced. But in the United States, Mag­nequench – the Gen­er­al Motors sub­si­di­ary respons­ible for mag­net pro­duc­tion – was bought out by two Chinese groups in 1997. In Japan, China first estab­lished itself as a sup­pli­er of pur­i­fied rare earths, then pushed Japan­ese com­pan­ies to relo­cate part of their mag­net pro­duc­tion to gain access to Chinese mar­kets, thereby gain­ing access to the last miss­ing tech­no­lo­gies in the early 2010s⁵.

China now hardly ever sells raw mater­i­als: it uses them to man­u­fac­ture products with high­er added value, such as mag­nets and elec­tric motors. In 2019, China accoun­ted for 92% of the world’s pro­duc­tion of rare earth per­man­ent mag­nets⁶. And the coun­try is now estab­lish­ing itself as a man­u­fac­turer of elec­tric cars – the final stage in this value chain – by pen­et­rat­ing the European market.

A few dec­ades ago, France was a major play­er in sep­ar­a­tion, thanks to Rhône-Poulenc (now Solvay). In 1992, for eco­nom­ic and reg­u­lat­ory reas­ons, its plant at La Rochelle had to restrict itself to cer­tain very spe­cif­ic uses for rare earths. How­ever, at the end of 2022, Solvay announced its inten­tion to relaunch its activ­it­ies in the sep­ar­a­tion and puri­fic­a­tion of rare earth oxides for mag­nets⁷.

The main dif­fi­culty remains Chin­a’s pos­i­tion: if neces­sary, it can arti­fi­cially increase price volat­il­ity. The eco­nom­ic viab­il­ity of this type of indus­tri­al pro­ject is dif­fi­cult to ensure, and it is now vir­tu­ally impossible to find private play­ers pre­pared to make the heavy invest­ments required to open new plants. The United States has decided to get round this prob­lem by pla­cing large orders through the Depart­ment of Energy and the Depart­ment of Defense to build up stra­tegic stocks. This has already made it pos­sible to relaunch the his­tor­ic Moun­tain Pass mine in Cali­for­nia and to fin­ance the future open­ing of a sep­ar­a­tion plant⁸.

The first thing to do – and the most effect­ive and quick­est – is to reduce con­sump­tion. The less we con­sume, the more we reduce our depend­ence. One pos­sible approach is eco-design: it is pos­sible to dis­pense with mag­nets and rare earths for cer­tain applic­a­tions, while accept­ing the asso­ci­ated loss of per­form­ance. Secondly, we need to devel­op com­pan­ies at every stage of the value chain. This cre­ates com­pet­i­tion and helps to break a mono­poly situ­ation. If China moves far enough down the value chain, the mar­kets will be less con­trolled by that state, which is the pur­pose of the European Uni­on’s Crit­ic­al Raw Mater­i­al Act, adop­ted in 2024.

Yes, of course, as Japan chose to do, for example, fol­low­ing the export quotas imposed by China in 2010. How­ever, recyc­ling remains a costly activ­ity both in terms of energy and eco­nom­ics if we are aim­ing for rare earth pur­ity levels sim­il­ar to those obtained from mines.

At Ecole Poly­tech­nique (IP Par­is), we are work­ing on the devel­op­ment of products that use recycled mater­i­als without neces­sar­ily involving the high levels of pur­ity needed to man­u­fac­ture mag­nets. For example, we are study­ing the influ­ence of sub­sti­tu­tions or impur­it­ies on the mag­net­ic prop­er­ties of rare earth alloys⁹. It is also pos­sible to find high­er value-added out­lets for rare earths whose mar­kets are shrink­ing (ceri­um and lanthan­um in par­tic­u­lar), which would make it pos­sible to increase the added value of rare earth sep­ar­a­tion activ­it­ies. The use of arti­fi­cial intel­li­gence is also envis­aged as an accel­er­at­or for this type of applic­a­tion. How­ever, this work is not yet at the indus­tri­al stage.

Interview by Anaïs Marechal